Diamond Offshore sees profit fall, bags two new rig deals

U.S.-based offshore drilling contractor Diamond Offshore booked a smaller profit for the third quarter of the year despite increase in revenues. During the quarter, the driller won two one-well contracts.

The driller on Monday posted a net income of $10.8 million for the third quarter 2017, a decrease compared to $13.9 million in the prior-year period. When compared to the second quarter of 2017, Diamond’s net income dropped by 32% in the third quarter of the year.

Diamond’s total revenues rose during the third quarter 2017 to $366 million from $349.2 million in the prior-year period. Sequentially, Diamond’s revenues dropped by 8%.

Diamond’s drilling expenses went up during the quarter totaling $198.1 million from $186.7 million in 3Q 2016.

“Despite the continued weakness in the offshore drilling market, we achieved favorable third quarter results,” said Marc Edwards, President and Chief Executive Officer. “During the quarter we were able to secure additional work for our proficient moored fleet, with new wins for the Ocean Apex and Ocean Patriot, at rates well above cash flow breakeven.”

Namely, according to the driller’s latest fleet status report, also issued on Monday, the semi-sub rig Ocean Patriot has been awarded a one-well contract with Shell in the UK set to start in mid-March and end in mid-May of the same year.

Further, the semi-sub rig Ocean Apex has been awarded a one-well contract with Woodside off Australia. The contract starts from mid-February and ends in early April 2018.

As of September 30, 2017, the company’s total contracted backlog was $2.6 billion, which represents 20 rig years of work.

Rig utilization

When it comes to Diamond’s fleet utilization during the third quarter 2017, ultra-deepwater floaters’ utilization increased to 61% from 48% in the prior-year period, deepwater floaters’ utilization decreased to 33% from 34% and mid-water floaters’ utilization dropped to 27% from 33%. Diamond Offshore’s jack-up fleet utilization, with only one rig Ocean Scepter, went up to 95% during the third quarter of the year from 86% in the second quarter of the year.

Looking at dayrates, ultra-deepwater floaters’ went from average dayrate of $452,000 in 3Q 2016 down to $436,000 in 2Q 2017 and landed on $407,000 in 3Q 2017.

Deepwater floaters’ dayrates sank from $303,000 in 3Q 2016 to $270,000 in 2Q 2017 and further down to $195,000 in 3Q 2017.

Finally, mid-water floaters’ dayrates started off with $311,000 in 3Q 2016 then increased to $397,000 by 2Q 2017 and ended with $322,000 in 3Q 2017.